Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the State Budgeting topic
No spam. Unsubscribe anytime.
Senate backs constitutional amendment to create flexible trust for excess severance taxes after extended debate
Summary
The Utah Senate approved Senate Joint Resolution 2, a constitutional amendment proposal to create a new trust to hold severance-tax surpluses and let the Legislature invest those funds for long-term purposes; debate centered on what revenue qualifies, voting thresholds to deposit funds and the balance between saving and current spending.
The Utah Senate voted to approve Senate Joint Resolution 2, a proposed constitutional amendment that would allow the state to set aside surplus severance-tax revenue in a second trust fund and use investment income for general‑fund purposes under rules the Legislature would later set.
Senator L. Hilliard, sponsor of the resolution, framed the measure as long-term planning: "we're talking some long term planning," he said, arguing the state should build a reserve to address future needs such as water and roads and grow the state school trust. Hilliard said bond counsel advised a rainy‑day reserve at about 5 percent of the budget (roughly $230 million) and argued for building the trust toward a $1 billion corpus over time so interest could generate ongoing revenue for the general fund.
Proponents said the amendment would give the Legislature authority to put surplus severance tax revenue into a protected but not completely locked fund, allowing the Legislature to direct deposits by statute. Senator Evans supported using severance‑tax revenue for the fund but cautioned against mixing mineral lease payments that are distributed to producing counties. "It certainly needs to be limited to the severance tax and not intermesh the mineral lease funds," Evans said.
Opponents and questioners pressed on safeguards. Senator Jenkins worried the Legislature could set aside funds rather than cut taxes or return surplus dollars to taxpayers, saying the approach "just bothers me." Senator Dimitrich recommended requiring a two‑thirds vote of the Legislature to transfer money into the trust so the minority would have a say when surpluses are large. Hilliard said those procedural protections could be considered later and defended a simpler constitutional authorization to create the mechanism first.
The floor debate also revisited how other Utah trust funds had been handled, including the tobacco settlement fund established in the 1990s. Hilliard said his proposal would not alter the tobacco fund's supermajority protections but would add a second vehicle for setting money aside that could be used more flexibly if the Legislature so chose.
President Valentine recorded the result as the resolution passing the Senate and referred it to the House for further action as transcribed. The sponsor indicated that statutory detail and any further restrictions — such as vote‑thresholds for deposits — could be considered in subsequent legislation if the amendment moves forward.
The next procedural step is transmittal to and consideration by the Utah House of Representatives.
